Finance Committee on Oct. 20th, 2016

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Mr. Chair, I am going to talk to my new Montreal friend, Mr. Leblanc.

You said that one of your priorities was Bombardier. I completely agree with you. The government has been in power for a year now and it is yet to take a position on the matter. In a market like aviation, as in a lot of other sectors, you have to send out signals. At the moment, the industry is in waiting mode.

I think you are right. Whether the answer is yes or no, at least we will have a decision. In your opinion, what would be the best way to help Bombardier?

[Michel Leblanc]

Thank you for the question.

By the way, I have to say that my objective just now was to tell you to work harder. I did not say that you must not come to Quebec City. If you decide to work harder, you can go to all the major cities in the country, including Montreal.

That is a question—

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Even here, we have a time problem.

[Michel Leblanc]

I would like to be able to look at your schedule. It would surprise me if you were unable to come to Montreal.

That said, on the subject of—

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

We could compare our agendas.

[Michel Leblanc]

Speaking of Bombardier, the company first needs to reassure the markets. I do not believe that Bombardier would necessarily use the billion dollars we are talking about. Nevertheless, an injection of capital into Bombardier, which would not dilute anything or jeopardize its margins, would reassure its clients and their markets. The whole challenge for this year is for Bombardier to make as many sales as possible. The challenge in closing those sales—since they are multi-year deals because of the maintenance service—is to reassure the markets by telling them that the company will be there when it is wanted. So Bombardier has to deal with a very simple dynamic. It cannot say that it is vulnerable. Instead, it is saying that government participation could help it.

If the Government of Canada is the cavalry, the cavalry should be sent in while the battle is being fought, not when it is over.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Okay, Mr. Leblanc. Thank you very much.

I have one last quick question.

You see, we are stronger when we work together. I completely agree with you about Bombardier.

What do you see happening with the high-speed train? Will Quebec City be excluded?

[Michel Leblanc]

No, VIA Rail's project includes Quebec City at one end. The president, Yves Desjardins-Siciliano, came to speak to us in the Montreal business community this week.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

What is your personal opinion about it?

[Michel Leblanc]

Quebec City must be a part of it.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you both for the interesting exchange.

Mr. Leblanc, have you done a tour of Bombardier before?

In August I did a tour of Bombardier's new CSeries plant. I think the amount of investment that goes in before they start the production of an aircraft is absolutely phenomenal. Whether it's Boeing, Airbus, whoever it is, it takes a tremendous amount of investment before they put a new aircraft out there.

Mr. Dusseault, you have seven minutes.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I will try to lighten things up a bit by saying that Sherbrooke is also an important city.

[Voices]

Oh, oh!

[A voice]

I agree with you.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I would like to go back to the issue of the cellular and Internet service.

I'm not able to determine exactly what the specific role of the government would be in solving the problem of unserviced areas. There is no need to travel deep into the regions to notice this problem. Sometimes, the signal is lost just outside big cities. The fact is that private telecommunications companies may be reluctant to invest in those places because it's not profitable and because they think that the market and the critical mass in those places is not worth the investment.

It's a very complex situation. Telecommunications companies are private, so they don't fall under the public sector. How can the government persuade them to go to the regions? If it's not profitable, how can they be persuaded to do so?

[André Nepton]

Our second recommendation really seeks to compensate in part for the investments made specifically in rural regions through an accelerated capital cost allowance.

To answer your question, AIDE-TIC has developed a model, particularly in Quebec, according to which we are owners of the host infrastructure for the communities that ask us to do so, namely the municipalities and the RCMs.

So we build sites, we follow the rules, we obtain government authorizations and we build the sites that will encourage big service providers to come. They become our clients and lease the community infrastructure.

So we have been able to do some good work with federal and provincial support, but also with municipal assistance. We have been able to set up host facilities open to all the service providers by reducing not only their commitment of costs slightly, but also the set-up delays. Generally, service providers can take up to three years to set up a site, whether because of regulatory matters or negotiations to acquire land. In our case, it usually takes three months.

With a plan, as soon as we make a commitment to the local people, we can propose an alternative to service providers that also helps with the integration.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Does that help telecommunications companies to be profitable in the long term in those places?

[André Nepton]

Yes, and it allows us to invite them to participate. In some places, we can have Bell as a client. We can also have Vidéotron and public safety organizations. Our infrastructure is community-based. So it's free for firefighters, police officers, and so on. That's how we were able to build some facilities in communities that had no services at all.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

I would like to go back to the credit card fees.

That's an extremely serious issue everywhere in Quebec and in Canada. Based on the experience of other countries around the world, have credit card companies run away from countries with regulated rates? In terms of credit cards, I would be surprised—

[Yves Servais]

To my knowledge, paying by credit card is more and more popular, and I think credit card companies are in every country.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Is there an example of reduced credit card services in countries where the fees are heavily regulated?

[Yves Servais]

Not to my knowledge.

I would like to provide some information on the issue.

Take the example of England, which regulated the rates to 0.3%. There was a class action lawsuit of $19 billion U.S. against MasterCard, which abused its monopoly position to the detriment of small and medium-sized businesses and consumers. However, I think it's representative of the position of strength that credit card companies have on the market. It's time to legislate those fees in Quebec and Canada.

I would also like to make another clarification. All the needs and projects presented today require funding. However, our request to regulate credit card fees comes at no cost for the Canadian government or the Canadian treasury. It's simply a matter of imposing regulations, as other countries have done. Credit card companies have to be told that they have gone too far and that the rates will now be set at less than 1%, at 0.5% or a similar rate. The government will decide.

A bill on the issue was introduced by a Liberal member. Over the past few years, the NDP has also been working very hard on this. The Conservative Party had taken some steps and took a step in the right direction, but I think it's time to move even further with the credit card issue.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I'm also aware of the importance of business transfers, and you have supported my colleague Guy Caron's bill with a view to addressing the inequity of transactions between family members rather than with others. I think the Board of Trade of Metropolitan Montreal and the Union des producteurs agricoles have also supported that bill.

As for farm businesses, do you foresee a growing problem, and what do you expect the impact to be if the next generation is not able to take over family farms? What impact can that have on farms being bought by foreigners, perhaps by multinational agricultural corporations that would own the land in Quebec and Canada?

[Pierre Lemieux]

It is certain that, if we are not able to address the situation, there may well be some dismantling, given the increase in land values. The businesses have increased in value, which is why it's important to grant exemptions; otherwise, those assets become taxable. That's why we support Mr. Caron's bill, but this is something that needs to be corrected.

We also have to consider family businesses that are jointly owned by two or more siblings or members of the same family. If only one of them wants to take over the family asset, the other one or two members will have to pay taxes. That flaw can be fixed through business models, but that costs a fortune. Small family farms don't have the ability to structure themselves or to pay for legal services to properly reorganize the taxes they will have to pay if the correction is not made.